Foreign direct investment (FDI) in India by multinational food processing companies rose US$2.14bn between April and October 2013, and continues to grow, reports The Hindu Business Line.
The Indian retail market, valued at US$490bn, is projected to grow at a compounded annual growth rate of 6 per cent to reach US$865bn by 2023, says the report.
Food and grocery retail opportunities in India are “immense”, panel members speaking at the seventh Food and Grocery Forum India reportedly told the publication, because it constitutes about 69 per cent of India’s total retail market.
Union Ministry for Food Processing Joint Secretary JP Meena said the food-processing sector is growing annually at 7.2 per cent compared with 3.9 per cent in agriculture for the last five years, ending 2013.
Foreign direct investment has also been increasing significantly at the rate of average inflow of US$117m for 11 years ending 2011/12. In 2012/13, it was US$401m, the minister said. He added that exports were increasing at the rate of 20.4 per cent per annum.
“Consumers shopping at modern trade have grown from 54 per cent last year to the current 68 per cent, driven by increasing consumption, comfortable shopping experience, new categories, wide variety of brands under a single roof and attractive prices,” Devendra Chawla, CEO of Food Bazaar, is reported as saying at the event.
Ajay Kaul, CEO of Domino’s said that 50 per cent of the market continued to sit on the sidelines, and that there was a huge opportunity in the migration of traditional to modern trade.
Nestle’s vice president, sales of organised trade, AS Chadha, said the mass media has a key role in drawing in the rural market. “The key element to be focused on is the supply chain and infrastructure in the Tier-II cities. The potential of these cities can be tapped only by facilitating supply chain and logistics,” he is reported as saying.
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